Mar

11

@VicNiederhoffer Tweets

March 11, 2020 |

1. One of the fake mumbo ideas that has the market in its grip (a cousin of the idea that the purpose of life is self sacrifice) is the idea that if the Dow drops 20% from a high it's a Bear Market and this presages a dismal future and further drops (the prez's fault et al) but there is no evidence that a 20% drop is bearish. Indeed it is bullish. The subject is complicated by the intra-day and inter day moves. Using intra day moves you start off with a random x% move on the bearish side in favor. But many intra day moves below 10% end up well. The intra day moves end up well above the 20% level and never hit the level again and are not counted thereby making the 20% level (which it seems to be bouncing off) never reaching the stats. Thus the bullish moves aren't considered. It's all part of the attempt to create dis…

I am asked why I speak of 20% drop in the Dow. Note the WSJ page 1 today. Presumably they have been brainwashed into using Dow because it's not near 20% in S&P.

2. I am particularly sensitive to the mumbo ideas that have the world in its grip having two days ago visited Monticello. The tour and focus is on how the great man fathered and exploited Sally Hemmings rather than his authorship of Declaration, etc. The stories about Sally Hemmings were rampant during Jefferson's admin fomented by a political opponent who owed $200 to the admin and needed the money to get married. At Duke med school, the same idea is rampant and they are ashamed of their founder because he was President of American Tobacco.

3. One of the best approaches to the market these days aside from noting that the 50,000 a century drift couldn't occur without random moves like the preceding two weeks being highly bullish, and counting using all intra day moves that were once below 20% and ended up above 20%. 

4. The idea that has the market and tries to make you ashamed of your optimism and heritage ("The World in the Grip of an Idea Revisited") is the procuring cause of the market's 7% drop on Monday the firing of Kenny Atkinson from the Nets and what it says about the idea that has world in its grip and the shame we should feel about the Founders.

5. The spf is trading 2807 down 55 from Tues up 115 close. It is normal for a Wednesday open to be very bearish after a big down Monday and up Tuesday. One would not be surprised to see next Monday close way up from here. Perhaps by Friday's close also.

7. Some kind readers have been kind enough to thank me for sharing my views. I realize I look rather foolish now with my old man river or 50,000 fold a century drift. But then again I have been rolling with that drift from S&P 800 in 2008 as my book with Ms. Kenner (Aubrey's mother) memorizes. I would point out that looking foolish is not predictive of future foolishness and also that the difference between e/p and 10 year yields which is a maximum now has to be ultimately a key determinant of future returns. As Mr. Jia said, "this too will pass" and I will not look so foolish in the reasonable future.

8. Mr. Swaps points out that the differential between e/p and int rates should be expected future e/p - i. There are three objections to that view.

1. Empirically using past e/p with quarterly earnings its not true.

2. The e/p forecasted with 2021 is the normal 7-9 %.

3. The rate of all companies capital budget their investments and use a 15% or 20% cutoff. This is not likely to change. Thus the e/p whether using forecasted earnings or the internal rate of return than companies use is stable and bullish.

9. Several readers have kindly pointed the finger at what they see as my Johnny one note reason for eternal bull being e/p-i. As I pointed out to the triumphal trio and the Yale nobelist useful idiot, it's not the dividend yield that explains the drift. If there is one thing it's the return from holding a risky piece of capitalism. And the return gets higher the more pessimistic and riskier the market. That's an empirical fact. One's always fear is that socialism will triumph. But as Mr. Ellison and I have pointed out many times there's always a fantastic fear in the market. Every year it's something. And yet old man river keep flowing 50,000 fold a century.

Follow @VicNiederhoffer on twitter for more. 


Comments

Name

Email

Website

Speak your mind

1 Comment so far

  1. none on March 12, 2020 4:23 am

    Allen Shaw started a real show with using that percentage benchmark.

    The important of ‘news’ in general is the ‘timing of news events’ not so much the content of the them.
    Richard Ney

    Sally Hemmings is a gathering trend, and over time as all trends will end, the nation’s thinking is base upon each generational teaching of ‘new’ ideas and thoughts that re occur over each generation. We today just live in a place of the ‘rebuttal’ world of showmanship.

    Thank the Beatles, Claus Clay such as giving the ‘fixed’ title against Sonny (only 40+/- carrier fights and consider the best!, just unreal) etc.

    The mania today is how outrages one can be, to be notice for anything one can think of this is the ‘new normal’, the trend will stay enforce until it changes. Capitalism flows to the path of lest resistance, and racism is ‘big bucks’, books, radio, movies, and the teaching of the youth has large dividends in payola.

    The Founders work is a true expression of ‘all’ and in a place in history that simply cannot in ‘any way’ be change towards what it ‘was’ and what ‘is’ today. As to why chipping away at it just is a fashionable thing to do. Those that understand the importance’s of their history in the world, are and always will be the building blocks of what ‘is’.

    Man has lost more knowledge than he has ever gain.

    Love Monticello and the man who built it, a true American Dream still in the works even today.

Archives

Resources & Links

Search